Insurers can damage your mental health

Writing in The Independent, Chiara Cavaglieri asks if insurance companies are doing enough to help people with mental health issues.

Campaign groups and charities have welcomed government moves to tackle mental health problems with a 10-year plan.

But insurance companies still do not seem to be offering the same support.

The mental health charity Rethink regularly receives calls from people refused cover because of mental health issues or had claims refused because of a clause that means insurers do not have to pay out for depression, stress and anxiety.

Insurance companies use medical history to set a premium level but when it comes to mental health there are often complications leading to a refusal to cover.

Mental illness is a regular exclusion for income protection, for example, and it also impacts on critical illness applications.

Under the Disability Discrimination Act, it is illegal for insurers to refuse to cover or charge higher premiums unless they can demonstrate statistically higher risks because of a specific mental health condition.

Some insurers, such as Fortis and Aviva, offer premium reductions if mental health related claims are excluded from an income protection policy.

With mortgage lenders insisting customers have life insurance those refused cover for severe mental illness could face real problems getting a mortgage.

But non-disclosure of a condition can lead to insurance being invalidated.

Until there is further clarification on how insurers assess policyholders with a history of mental illness it is worth going to a specialist broker and seeking some independent financial advice.

There are organisations geared towards people who have been refused cover because of a pre-existing medical condition.